Dr. Martinez [not his real name] has prepared for retirement the ‘right’ way.  His $1.4 million house is paid off.  He has $1.5 million in his 401(k).  He’s ten years from retiring as a partner in his practice, and is a popular speaker at medical conferences.  He makes $650,000 a year, and he’ll need $250,000 in retirement, before taxes, to maintain the lifestyle he and his wife enjoy. 

The problem?  A safe withdrawal rate of 4% (which only gives him a 50/50 chance of not running out of money) will require over $6 million in his 401(k); if in the next 40 years there are any tax increases or market losses, he’ll need half again that much, at least.  Chasing after a $9 million unicorn?  Good luck.

They’re reluctantly planning to sell the home they raised their three children in, downsize and take the difference for travel and additional retirement income; but that’s small potatoes against the challenge he’s facing.

The plan we set up allows him to withdraw $180,000 tax-exempt, from a $3 million tax-exempt account.  Accumulating that balance in ten years is relatively easy. 

As a bonus, their Social Security benefits will remain tax-free, and they’ll always pay the lowest Medicare premiums possible.  If taxes go up, he doesn’t care.  If the stock market tanks, he doesn’t care.  These things will have no effect on his retirement.

He and his wife just returned from three weeks in Europe, celebrating their 30^th wedding anniversary.  His financial future is looking secure, to the point they’ve decided to keep their home, and maybe buy another in a foreign country.  He’s considering retiring five years early, so they can travel more extensively while they’re still young, and he can volunteer teaching medical students at his alma mater.

Dr. Martinez has found a way to go from good, to great.  If you could go from good to great, would you want to know how?

This hypothetical example is used for illustrative purposes only and is not representative of actual results